january - june 2017...2.2.3. cross-border e-commerce market in china windeln.de is also active in...

HALF YEAR REPORT 2017January - June 2017

2

H1 - 2017windeln.de SE

TABLE OF CONTENTS

WINDELN.DE GROUP AT A GLANCE

INTERIM GROUP MANAGEMENT REPORT

Fundamental information about the Group

Report on economic position

Outlook

Opportunities and risk report

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement and other comprehensive income

Consolidatedstatementoffinancialposition

Consolidatedstatementofcashflows

Consolidated statement of changes in equity

Condensednotestotheinterimconsolidatedfinancialstatements

Responsibility statement

SERVICE

Glossary

Financial calendar

Imprint

3


WINDELN.DE GROUP AT A GLANCE

H1 2017

47,921,269

69.1%

46.8%

1,102,908

1,209,634

2.20

76.2%

104,982,475

86.79

3.3%

5.6%

14.8%

16.4%

106,481

26,214

24.6%

4,476

4.2%

-12,972

-12.2%

-13,114

297

38,462

1,875

1,250

297

41,884

-0.73

-0.63

Performance Indicators

Site Visits

Mobile Visit Share (as % of Site Visits)

Mobile Orders (as % of Number of Orders)

Active Customers

Number of Orders

Average Orders per Active Customer (as Number of Orders)

Share of Repeat Customer Orders (as % of Number of Orders)

Gross Order Intake (in EUR)

Average Order Value (in EUR)

Returns (as % of Gross Revenues from Orders)

Marketing Cost Ratio (as % of Revenues)

AdjustedFulfilmentCostRatio(as%ofRevenues)

Adjusted Other SG&A Expenses (as % of Revenues)

Earnings Position

Revenues (in kEUR)

GrossProfit(inkEUR)

GrossProfit(as%ofRevenues)

Operating Contribution (in kEUR)

Operating Contribution (as % of Revenues)

Adjusted EBIT (in kEUR)

Adjusted EBIT (as % of Revenues)

Financial Position

Cashflowfromoperatingactivities(inkEUR)

Cashflowfrominvestingactivities(inkEUR)

Cash and cash equivalents at the end of the period (in kEUR)

Current time deposits (in kEUR)

Non-current time deposits (in kEUR)

Restricted cash (in kEUR)

Total cash and time deposits (in kEUR)

Other

Basic earnings per share (in EUR)

Diluted earnings per share (in EUR)

H1 2016 R

43,452,238

60.3%

43.2%

965,493

1,125,437

2.32

76.9%

102,408,445

90.99

6.0%

7.1%

18.7%

16.9%

91,925

26,400

28.7%

2,832

3.1%

-12,727

-13.8%

-20,884

-622

67,116

-

-

107

67,223

-0.81

-0.75

Q2 2017

21,883,792

69.8%

47.3%

1,102,908

580,052

2.20

76.2%

52,772,633

90.98

2.9%

5.3%

14.2%

16.9%

54,602

14,114

25.8%

3,499

6.4%

-5,727

-10.5%

-5,975

378

38,462

1,875

1,250

297

41,884

-0.39

-0.34

pp = percentage points

Allperformanceindicatorsaswellasthesectionearningspositionincludeamountsfromcontinuingoperationsonly.

Q2 2016 R

22,105,910

62.0%

43.9%

965,493

531,926

2.32

76.9%

47,886,059

90.02

5.8%

7.8%

18.3%

17.3%

44,886

13,169

29.3%

1,521

3.4%

-6,259

-13.9%

-11,851

274

67,116

-

-

107

67,223

-0.38

-0.35

4


INTERIM GROUP MANAGEMENT REPORT AS OF JUNE 30, 2017

1. Fundamental information about the Group

The statements on the business model, Group structure, strategy and competitive situation of the Group, management system as

wellasresearchanddevelopmentmadeintheAnnualReport2016stillapplyasofJune30,2017.

2. Report on economic position

2.1. Developmentoftheeconomyasawhole

Asanonlineproviderofproductsforbabies,toddlersandchildren,thewindeln.deGroupisaffectedbythegeneraleconomic

development, the consumption climate but especially by the development of internet commerce and mail-order business.

The Institute for World Economy (IfW) in Kiel forecasts an increase in Gross Domestic Product of 1.7% in Germany for 2017 (2016:

1.8%)whichisconsideredbeingatthethresholdtoaneconomicboomperiod.TheIfWthereforewarnsofincreasingeconomic

downside risks.1 Internet commerce recordeda revenuegrowthof11% inGermany in2016and thereby continues its strong

growth.TheGermanRetailOrganisation(HandelsverbandDeutschland;HDE)expectsacontinualrevenuegrowthof11%in2017.2

IntheEuropeanUnion(EU28),retailsalesgrewby3%overtheprioryearperiod(April2017versusApril2016),attributablefactors

weretheincreasesinthenon-food(+4.2%)andfoodsector(+2.6%).Mail-orderbusinessandinternetcommerceevenincreased

sales by 11% compared to prior year (also April 2017 versus April 2016).3 For the full year 2017, GfK Consumer Research Organisation

providesapositiveoutlookforretailinEuropeandexpectsstronggrowthratesespeciallyinEasternEurope(upto9.8%).4

2.2. Sectorspecificenvironment–marketforproductsforbabies,toddlersandchildren

2.2.1. German and European market

Thegrowthofthee-commercemarketforconsumableproductsforbabiesandotherbabyandtoddlerproductsisdecisivefor

the Group.

Theonlineretailchannelgenerallyoffersagoodpossibilitytosellconsumablesforbabies,astheseproductsaresimilartoother

product categories that have already been sold online for many years, such as consumer electronics, consumer equipment and

clothing.Productsforbabies, toddlersandchildrenaretypicallybrandedarticles,durableandboughtfrequently.Thisoffersa

significantopportunitytogrowtheonlineshareofsales.Demandcanalsobepredictedtoalargeextentandthereisalowneed

forindividualization.Thepossibilityofbeingabletoshopatanytimeandanyplacewithhomedeliveryalsooffersaconsiderably

moreconvenientshoppingexperiencecomparedtotraditionalofflineshopping.

The turnover in the segment baby and toddler products (only e-commerce) is expected to increase to EUR 2.6bn in Germany in

2017. By 2021, the market volume is expected to amount to EUR 3.7bn.5 In Germany, the online retail share of all product categories

isexpectedtoincreasefrom7.2%in2015to9.9%in2019,butbelowGreatBritainandNorway.6 In 2015, the birth rate reached 1.5

childrenperwomaninGermany–forthefirsttimein33years.7 Since 2012, there has been a positive development of birth rates.

FromtheGroup’sperspective,themedium-termgrowthoftheentiremarketforbabyandchildrenproductsisthereforeverylikely.

1 ifw;https://www.ifw-kiel.de/medien/medieninformationen/2017/konjunkturprognose-deutsche-wirtschaft-mit-uberhohter-drehzahl;retrievedonJuly24,20172 ehi;https://www.handelsdaten.de/deutschsprachiger-einzelhandel/umsatz-im-b2c-e-commerce-deutschland-zeitreihe;retrievedonJuly24,20173 eurostat;http://ec.europa.eu/eurostat/documents/2995521/8048825/4-06062017-AP-DE.pdf;retrievedonJuly24,20174 gfk;http://www.gfk.com/de/insights/press-release/einzelhandel-in-europa-zentral-und-osteuropa-holen-auf/;retrievedonJuly24,20175 Statista,https://de.statista.com/outlook/257/137/spielzeug-baby/deutschland#,retrievedonJuly24,20176 eMarketer,http://www.emarketer.com/public_media/docs/eMarketer_eTailWest2016_Worldwide_ECommerce_Report.pdf,retrievedonJuly24,20177 StatistischesBundesamt,https://www.destatis.de/DE/ZahlenFakten/GesellschaftStaat/Bevoelkerung/Geburten/Geburten.html,retrievedonJuly24,2017

5


TheGroupexpectsgrowthofthee-commerceshare,theonlineinfrastructureaswellasanincreasinguseofonlineoffersinall

partsofEurope.Inthefinancialyear2017,revenuesofthesectorbabyandchildrenproducts(onlye-commerce)isexpectedto

reach EUR 12.1bn in Europe. Until 2021, the market volume is expected to amount to EUR 16.1bn.8

2.2.2. Mobile devices

The constant rise of the use of smartphones and tablets is one of the main reasons for the increasing penetration of online facilities

inEurope.Customersareprovidedwithacomfortableoptiontoshopatanytimeandanywhere.This isahugeadvantagefor

thesaleofproductsforbabiesandtoddlers.Furthermore,onlinemarketingviamobiledevices(e.g.notifications)offersanew

opportunitytoincreasedailyinteractionwithcustomers.

2.2.3. Cross-border e-commerce market in China

windeln.deisalsoactiveintheChinesecross-bordere-commercemarket.Chinesecustomersmakepurchasesdirectlyfromforeign

online dealers. In 2016, 15% of the Chinese population already bought online from other countries. eMarketer predicts that this

numberwillincreaseupto25%in2020.TheoverallvolumeoftheChinesecross-bordere-commerceisexpectedtoamountto

around USD 85bn in 2016.9

With the increasing disposable income of the Chinese population, the demand for high-quality foreign products, especially from

Germany,increasesaswell.AccordingtoTmall10, the majority of cross-border e-commerce purchases are products like cosmetics,

bodycareaswell asproducts formothersandchildren.11 China is the largest market regarding baby and children’s products

worldwide.ItisexpectedthatrevenuesinthisregionwillincreasetoEUR36.2bnin2017.12

ThegrowthoftheChinesecross-bordere-commercemarketisstimulatedbythefollowingkeydrivers:

• With more than 17.8 million births in 201613(agrowthof7.9%comparedto2015)andanincreasingpurchasingpower,the

Chinesemarketforbabyproductsisgearedtowardsgrowth.Thistrendisparticularlystrengthenedbytheendoftheone-

childpolicyinChinawhichwasannouncedattheendofOctober2015.Expertsexpectbetween17and20millionbirthseach

year until 2020.

• Themarketisalsostrengthenedbythefactthatmoreandmorebabiesarefedwithmilksubstitutesinsteadofbreastmilk.In

2016,around800thousandtonsofmilkpowderwereimportedintoChina.Until2025,theimportsareexpectedtoincrease

to 1.2 million tons.14Thehigherdemandforforeignqualityproductsisalsosupportedbypastscandalswithcontaminated

local milk formula products.

• ThepurchasingpowerofthemiddleclassinChinaisforecastedtogrowbyanaverageannualGDPpercapitagrowthof8%

between2015and2020.15Basedonthesefacts,theGroupexpectstheChinesemarketforbabyproductstokeepgrowing

considerably in the coming years.

8 Statista,https://de.statista.com/outlook/257/102/spielzeug-baby/europa,retrievedonJuly24,20179 eMarketer,https://www.emarketer.com/Article/China-Embraces-Cross-Border-Ecommerce/1014078,retrievedonJuly24,201710 Tmall ist eine chinesische Website, über die nationale und internationale Unternehmen Markenartikel an chinesische Kunden verkaufen können. Tmall gehört zurAlibaba-Gruppeundwurde2008gestartet.11 AnnualReportonTmallGlobalData2016,gefundenaufhttps://jingdaily.com/tmalls-cross-border-e-commerce-sales-grow-by-30-in-china/,retrievedonJuly24, 201712 Statista,https://de.statista.com/outlook/257/100/spielzeug-baby/weltweit#takeaway,retrievedonJuly24,201713 NationalHealthandFamilyPlanningCommission(NHFPC)statistics,gefundenaufhttp://www.bbc.com/news/world-asia-china-38714949,retrievedonJuly24, 201714 AußenstelledesamerikanischenLandwirtschaftsministeriums(USDA)inPeking,gefundenaufhttps://www.agrarheute.com/news/milchprodukte-china-will-im port-um-70-prozent-steigern,retrievedonJuly24,201715 International Monetary Fund, World Economic Outlook October 2016

6


2.3. Course of business

New shop system for German windeln.de online shop

Following thesuccessfulmigrationof theshops for Italy (pannolini.it), Switzerland (windeln.ch, kindertraum.ch, toys.ch),China

(windeln.com.cn) and nakiki.de last year, theGerman Shopwindeln.de has nowbeen successfullymigrated to the new shop

platformaswell.Thefactthattheseshopsarerunningonthesametechnicalplatformwillhelpwindeln.detoimprovequalityfor

customers, further streamline processes and achieve technical and process-oriented synergies.

Thenewshopsystemimprovestheshoppingexperienceforthecustomerduetofasterwebpageloadingtimesonalltechnical

devicesaswellasnewfeaturesforpaymentandcheckout.Shoppingonwindeln.deismucheasiernowduetoanoptimizeddesign

and user-friendly presentation on small devices such as mobile phones.

NewfeaturescanbeimplementedmuchfasterandcanbescaledacrossshopsduetothemodernITarchitecturebasedonmicro

services.Intermsofmarketing,themigrationoffersadvantagesbydevelopingcampaignssolelyforoneparticularmarketwhich

canthenbequicklyrolledouttoothermarketsandonalldevices.Furthermore,crosssellingbetweentheshopswindeln.deand

nakiki.de is enhanced by using a joint shopping cart.

Foundation of windeln Management Consulting (Shanghai) Co., Ltd.

EffectiveFebruary21,2017,thesubsidiarycompanywindelnManagementConsulting(Shanghai)Co.,Ltd.withregisteredofficesin

Shanghai,China,wasfounded.Thesubsidiaryoperatesasaservicecompanyformarketingactivitiesandforthedevelopmentof

further distribution channels in the Chinese market.

Additional transport service provider for deliveries to China

EndofQ12017,windeln.deengagedanadditionaltransportserviceproviderfordeliveriestoChina.Morefavorableconditions

offeredby thenewprovider result in cost savings in sellinganddistributionexpenses forwindeln.de.Asa result, sellingand

distributionexpensescouldbenoticeablyreducedinthefirsthalfof2017.

Guarantee claims from the acquisition of Bebitus

SinceQ42016,windeln.deSEisinvolvedindiscussionswithtwoofthesellersofBebitusontheenforcementofguaranteeclaims

from the share purchase agreement, and on a potential reduction of subsequent purchase price components. The discussions

wereongoinginH12017andcompletedatthebeginningofQ32017.Pleaserefertosections6and10oftheNotesforfurther

information.

Amendment No. 2 to the purchase agreement of the Feedo Group

On April 13, 2017, one founder of the Feedo Group left the company. Thereby, a so called leaver event occurred. As a result,

AmendmentNo.2tothepurchaseagreementwasagreed.Besidestheprocessingoftheleaverevent,AmendmentNo.2regulates

the payment of the contingent consideration of the years 2015 and 2016. Please refer to section 6 of the Notes for further

information.

Tmall Global award

OnApril 18, 2017,windeln.de received an award asmost popular international brandat a TmallGlobal ceremony at Alibaba

Group’sheadquarterinHangzhou,China.Theawardunderlineswindeln.de’sstrongperformancesinceopeningofaflagshipstore

onAlibaba’se-marketplaceTmallGlobalinJuly2016.

Annual General Meeting of windeln.de SE

On June 2, 2017, the first Annual General Meeting (AGM) of windeln.de SE took place since the transition into a European

company(SE).AttendanceattheAGMwas75.56%ofthevotingsharecapital.TheAGMelectedTomaszCzechowiczasnewmember

ofthesupervisoryboard.Thesupervisoryboardthereforeconsistsofsixmembersagain.BesidestheelectionofMr.Czechowicz,

theAGMapprovedallotheragendaitemswithmajorityofthevotes.

7


Update on STAR program

Inthefirsthalfof2017,windeln.desucessfullyimplementedfurthermeasuresoftheSTARprogram.Themainfocuswasonthe

outsourcingof customerservice,on theclosureof theSwissofficeandon thepreparationof (a) the relocationof thecentral

warehouseand(b)theintegrationofBebitus.

TheoutsourcingofcustomerservicewassucessfullyconcludedinQ22017.Sinceendof2016,partsofcustomerrequestshave

been already handled by an external service provider. In Q2 2017, this service provider completely took over customer service

responsibilities. The reaction of our customers to this change was positive. Due to the outsourcing, selling and distribution

expenseswillfurtherdecrease;inthefirsthalfof2017,thesavingshavenotyetbeenvisibleastwocustomerserviceteamshave

beenparallellyworkingduringthetransitionphaseuntilendofApril2017.

In the first half of 2017, the office in Uster, Switzerland,was closed. The tasks of the local teamwere transferred to central

departments in Munich. Thereby, synergies are realized and future marketing and administrative expenses are reduced.

TherelocationofthecentralwarehousetoEasternEuropewasfurtherpreparedinH12017andanexternaltenderwasdone.

ExtensiveworkiscarriedoutonthefurtherintegrationofBebitustocentralsystemsoftheGrouptorealizesynergies.Inthefirst

halfof2017,necessarypreparationswereperformedtomigratetheonlineshopsofBebitustothenewshoparchitectureofthe

Group. Simultaneously to the migration, the shops of Bebitus are connected to the ERP system of the Group.

8


2.4. Netassets,financialpositionandresultsofoperationsofthewindeln.deGroup

2.4.1. Results of operations

Consolidated income statement

InH1 2017, theGroup generated revenues of EUR 106,481k, an increase of 16% compared toH1 2016 (EUR 91,925k). Thus,

windeln.deGroupisgrowingfasterthantheoverallinternetcommercemarket(11%expectedgrowthfor2017).

The revenue growthwas in particular drivenby the Tmall Shop inChina, launched in July 2016. Also the International Shops

pannolini.it(+169%),Bebitus(+35%)andFeedo(+30%)demonstrateanabove-averagegrowth.Generally,themanagementteam

ofthewindeln.deGroupaimsatgrowingprofitably.Thus,investmentismadeinthosemarketswithahighgrowthpotential.On

marketswithahighmarketshare,thefocushasshiftedtoanincreaseinprofitability.

Themargin(grossprofitaspercentageofrevenues)decreasedinH12017by4.1ppto24.6%,comparedtotheprioryearperiod.

TheoperatingsegmentInternationalShopscould improveitsmargin, it ishoweverstillbelowthemarginoftheGermanShop

operatingsegment.ThegrowingrevenueshareofthesegmentInternationalShopswithintheGroupnegativelyaffectstheGroup’s

margin. The margin of the operating segment German Shop decreased compared to the prior year period. This development is

causedbyaproductmixwithhighersalesoflow-marginproductscomparedtotheprioryearperiod.

H1 2016 R

91,925

-65,525

26,400

-33,694

-11,917

607

-595

-19,199

820

-14

806

-18,393

-8

-18,401

-2,892

-21,293

H1 2017

106,481

-80,267

26,214

-32,434

-12,945

654

-569

-19,080

33

-43

-10

-19,090

6

-19,084

-

-19,084

Q2 2016 R

44,886

-31,717

13,169

-16,758

-5,607

520

-518

-9,194

710

47

757

-8,437

-8

-8,445

-1,662

-10,107

Q2 2017

54,602

-40,488

14,114

-16,310

-7,833

394

-507

-10,142

15

-10

5

-10,137

3

-10,134

-

-10,134

absolutein kEUR

9,716

-8,771

945

448

-2,226

-126

11

-948

-695

-57

-752

-1,700

11

-1,689

1,662

-27

relativein %

22%

28%

7%

-3%

40%

-24%

-2%

10%

-98%

<-100%

-99%

20%

<-100%

20%

0%

Change

kEUR

Continuing operations

Revenues

Cost of sales

Gross profit

Selling and distribution expenses

Administrative expenses

Other operating income

Other operating expenses

Earnings before interest and taxes

(EBIT)

Financial income

Financial expenses

Financial result

Earnings before taxes (EBT)

Income taxes

Profit or loss from continuing

operations

Profit or loss after taxes from

discontinued operations

PROFIT OR LOSS FOR THE PERIOD

absolutein kEUR

14,556

-14,742

-186

1,260

-1,028

47

26

119

-787

-29

-816

-697

14

-683

2,892

2,209

relativein %

16%

22%

-1%

-4%

9%

8%

-4%

-1%

-96%

>100%

<-100%

4%

<-100%

4%

-10%

Change

9


Selling and distribution expenses decreased in the reporting period by EUR 1,260k or 4% to the comparative period. This is mainly

attributabletoareductioninlogisticsexpensesby12%.Ontheonehand,theabove-mentionedproductmixoflow-marginproducts

intheGermanShopleadtolowerlogisticsexpenses.Ontheotherhand,costreductionmeasuresimplementedinthepaststart

showingtheireffects,thosemeasurescompriseindetailthechangetoanadditionaltransportservicesupplierfordeliveriesto

Chinaandsavings fromthereductionofsplitshippingstocustomers inSwitzerlandand Italy.Additionally, the increase in the

averageordervalueinH12017positivelyimpactstheratiooflogisticsexpensestorevenues.

Furthercostsavingsof7%wereachievedformarketingexpenses.TheGermanShopinparticularfocuseditsonlinemarketing

activitiesinH12017onhigh-marginnon-consumableproducts,resultinginadecreaseintransactionvolumeandalsoinlowerfees

per transaction.

The outsourcing of customer service activities, completed in the end of Q2 2017, had a smaller effect, that was almost fully

compensatedbytheparalleloperationoftwocustomerserviceteamsatthebeginningoftheyear.Overall,windeln.deincreasingly

benefits fromeconomiesofscale.This is reflectedby themoderate increase insellinganddistributionexpenses (3%,without

savingsinlogistics)comparedtothestrongrevenuegrowth(16%).

Administrative expenses increased by EUR 1,028k or 9% over the comparable period. This development is mainly attributable to

increasing personnel expenses in relation to the acquisition of the Feedo Group and Bebitus. Portions of the economic purchase

price of these subsidiaries are considered share-based payments. In H1 2017, personnel expenses of EUR 5,687k (H1 2016:

EUR4,459k)wererecognizedforthosetransactions.Excludingshare-basedpaymentsfromacquisitions,administrativeexpenses

wouldhavedecreasedby3%.

Otheroperatingincomeandexpensesmainlyconsistofgainsandlossesfromforeignexchangeratedifferencesbetweenthedate

of origin and the date of payment of foreign exchange receivables and liabilities. Foreign exchange gains decreased by EUR 117k,

foreignexchangelossesdecreasedbyEUR56k.InH12017,underpaymentstosuppliersandoverpaymentsfromcustomersinthe

amountofEUR97kwererecognizedasotheroperatingincome,aftertheyhadexpiredthestatutorylimitationperiod.

WithminusEUR10k,thefinancialresultissignificantlylowerthanintheprioryearperiod(plusEUR806k).Thisismainlyattributable

toEUR795krecognizedasfinancialincomefortheremeasurementofcontingentpurchasepriceobligations(EarnOuts)inthe

prioryear.Inthecurrentsixmonthsperiod,onlyEUR1kwererecognizedasfinancialexpenseforthefairvalueremeasurement.

InQ12017,theGroupenteredintoaforeignexchangeforwardagreementaftertheCzechNationalBankannouncedtogiveupits

exchangeratepegbetweenCzechKorunaandEuro.TheagreementisaccountedforasaFairValueHedgeandincurredrealized

foreignexchangegainsofEUR1kandunrealizedforeignexchangegainsofEUR12k,recognizedwithinthefinancialresult.The

agreementcomprises17separatetrancheswithmaturitydatesbetweenApril21andDecember22,2017.

Material financial and non-financial key performance indicators

Material financial key performance indicators

ThematerialfinancialperformanceindicatorsoftheGroupconsistofrevenues,operatingcontributionaspercentageofrevenues

and adjusted EBIT as percentage of revenues. The development of revenues is described in the prior section. The development of

operatingcontributionaspercentageofrevenuesisdescribedinsection2.5.“Otherfinancialperformanceindicators”.

ForthepurposesofmanagingtheGroup,earningsbeforeinterestandtaxes(EBIT)areadjustedforexpensesinconnectionwith

share-basedcompensationaswellasexpensesandincomeinconnectionwithacquisitionsandintegrationofnewsubsidiaries

andexpensesinconnectionwiththeexpansionoftheGroupaswellasforexpensesforreorganization,internalrestructuringand

the ERP system change.

10


AdjustedEBITinH12017isminusEUR12,972kandhasslightlydeterioratedcomparedtotheprioryearperiod.However,adjusted

EBIT as percentage of revenues improved by 1.6pp from -13.8% to -12.2%.

Material non-financial key performance indicators

Thematerialnon-financialkeyperformanceindicatorsconsistofnumberofactivecustomers,averagenumberoforderperactive

customers, average order value and the share of repeat customers.

• Thenumberofactivecustomerincreasedby4%from1,065,089asofDecember31,2016,to1,102,908asofJune30,2017.The

highestincreasewasachievedintheoperatingsegmentInternationalShops.

• Theaveragenumberofordersfromactivecustomersamountsto2.20asofJune30,2017,andremainsbasicallyunchanged

compared to December 31, 2016 (2.19).

• TheaverageordervalueinH12017decreasedby5%comparedtoH12016tonowEUR86.79.InQ22017,thisvalueamounts

toEUR90.98andwassignificantlyhigherthaninQ12017(EUR82.93).

• Theshareofrepeatcustomersis76.2%asofJune30,2017,atasimilarlevelasofDecember31,2016(76.6%).

H1 2016 R

-19,199

566

5,086

351

132

337

-12,727

H1 2017

-19,080

224

5,987

-103

-

-

-12,972

Q2 2016 R

-9,194

108

2,320

103

67

337

-6,259

Q2 2017

-10,142

106

4,333

-24

-

-

-5,727

absolutein kEUR

-948

-2

2,013

-127

-67

-337

532

relativein %

10%

-2%

87%

<-100%

-8%

Change

kEUR


(EBIT)

adjusted for costs of acquisition,

integration and expansion

adjusted for share-based

compensation

adjusted for costs of reorganization

adjusted for costs of restructuring

undercorporatelaw

adjusted for ERP system change

Adjusted EBIT

absolutein kEUR

119

-342

901

-454

-132

-337

-245

relativein %

-1%

-60%

18%

<-100%

2%

Change

11


Segment results of operations

TheoperatingsegmentInternationalShopswasthemaingrowthdriverintheGroup.Thesegmentachievedrevenuegrowthof

33%, mainly in the markets of Bebitus (Spain, France, Portugal), Feedo Group (Czech Republic, Poland, Slovakia) and pannolini.it in

Italy.Atthesametime,profitabilitycouldbeimprovedinthosegrowthmarkets.EBITimprovedby10.3pptonow-31.8%.Adjusted

EBIT, mainly adjusted by share-based compensation, improved by 8.0pp to -14.9%.

The operating segment German Shop, comprising the activities of the shops www.windeln.de, www.nakiki.de,

www.windeln.com/cnandsalesontheshoppingplatformTmall,achievedsomegrowth,too.However,thefocusinthissegment

isonmoderategrowthwithsubstantial improvementofprofitability.ThesegmentsucceededinincreasingitsadjustedEBITin

Q2 2017 to 3.1% after -3.3% in Q1 2017 (EBIT before adjustments: 3.0% in Q2 2017 and -3.3% in Q1 2017). This improvement is a

directresultofthestronggrowthinChinaaswellasmeasuresoftheSTARprogramimplementedinthesecondhalfof2016,in

particular measures to optimize the product range, the introduction of central purchasing responsibilities, the opening of the Tmall

shopandthefurtherexpansionoftheprivatelabelbusiness.WeseetheGermanShopprogressingtoprofitability.

H1 2016 R

65,958

26,009

-42

91,925

9,650

101,575

-368

-10,961

-7,870

-19,199

-2,891

-22,090

-137

-5,956

-6,634

-12,727

H1 2017

71,957

34,616

-92

106,481

-

106,481

-57

-11,012

-8,011

-19,080

-

-19,080

-9

-5,168

-7,795

-12,972

Q2 2016 R

31,163

13,765

-42

44,886

4,557

49,443

-71

-5,306

-3,817

-9,194

-1,661

-10,855

94

-3,053

-3,300

-6,259

Q2 2017

36,616

18,019

-33

54,602

-

54,602

1,110

-6,927

-4,325

-10,142

-

-10,142

1,150

-2,795

-4,082

-5,727

absolutein kEUR

5,453

4,254

9

9,716

-4,557

5,159

1,181

-1,621

-508

-948

1,661

713

1,056

258

-782

532

relativein %

17%

31%

-21%

22%

10%

<-100%

31%

13%

10%

-7%

>100%

-8%

24%

-8%

Change

kEUR

German Shop

International Shops

Reconciling item to Group revenues

Revenues from continuing

operations

Shopping Clubs

Total Group revenues

German Shop contribution

International Shops contribution

Reconciling item to Group EBIT

EBIT from continuing operations

Shopping Clubs contribution

Total Group EBIT

German Shop contribution

International Shops contribution

Reconciling item to adjusted

Group EBIT

Adjusted EBIT from continuing

operations

absolutein kEUR

5,999

8,607

-50

14,556

-9,650

4,906

311

-51

-141

119

2,891

3,010

128

788

-1,161

-245

relativein %

9%

33%

>100%

16%

5%

-85%

0%

2%

-1%

-14%

-93%

-13%

18%

2%

Change

12


Regional results of operations

windeln.deGroupsucceededinincreasingitsrevenuesmainlyinthegeographicalregionsChinaandrestofEurope,comparedto

theprioryearperiod.GSA,however,fellbehindduetoreducedmarketingactivitiesinthisregion.

2.4.2. Financial position

InH12017,theGroupincurrednegativecashflowsfromoperatingactivitiesofEUR13,114krepresentingasignificantreductionof

cashoutflowsby37%comparedtotheprioryearperiod.Alsofromalonger-termperspective,thispositioncouldbecontinuously

improved. Negative cash flows from operating activities gradually decreased from EUR 12,318k inQ4 2015 to EUR 9,554k in

Q42016tonowEUR5,975kinQ22017.TheimprovementinH12017resultsfromthelowerlossoftheperiod,andfromreductions

of capital intensive assets, in particular inventories and trade receivables. The reduction of deferred revenue has a negative impact

onoperatingcashflows.Thisisaconsequenceoffasterdeliveriestocustomersandlowerrebatesgiventocustomersbymeans

of loyalty bonuses.

TheimprovementofcashflowsfrominvestingactivitiesfromcashoutflowsofEUR622kinH12016tocashinflowsofEUR297k

inH12017istheresultofvariouseffects.WhiletheprioryearhadcashinflowsofEUR678kfromtheacquisitionofsubsidiaries,

thecurrentyearonlyshowsacashoutflowofEUR8k.Anotherone-timeeffectistheredemptionoftimedepositsofEUR1,250k

receivedinH12017.

H1 2016 R

91,925

27,349

40,901

23,675

H1 2017

106,481

24,306

50,920

31,255

Q2 2016 R

44,886

13,068

19,135

12,683

Q2 2017

54,602

10,963

27,280

16,359

absolutein kEUR

9,716

-2,105

8,145

3,676

relativein %

22%

-16%

43%

29%

Change

kEUR

Revenues from continuing

operations

Germany,Austria,Switzerland(GSA)

China

Other/restofEurope

absolutein kEUR

14,556

-3,043

10,019

7,580

relativein %

16%

-11%

24%

32%

Change

H1 2016 R

-21,293

-20,884

-622

-53

88,678

-21,559

-3

67,116

-

107

67,223

H1 2017

-19,084

-13,114

297

-26

51,302

-12,843

3

38,462

3,125

297

41,884

kEUR

Loss for the period

Net cash flows from operating activities

Net cash flows from investing activities

Net cash flows from financing activities

Cash and cash equivalents at the beginning of the period

Change in cash and cash equivalents

Change in cash and cash equivalents due to foreign

exchange rates

Cash and cash equivalents at the end of the period

Time deposits

Restricted cash

Total cash, time deposits and restricted cash

absolutein kEUR

2,209

7,770

919

27

-37,376

8,716

6

-28,654

3,125

190

-25,339

relativein %

-10%

-37%

<-100%

-51%

-42%

-40%

<-100%

-43%

>100%

-38%

Change

13


ThecreditlineagreementswithCommerzbankAG(EUR5m)andDZBANKAGDeutscheZentral-Genossenschaftsbank(EUR4m)

wereextendeduntilSeptember30,2017.ThematurityofthesecuredrevolvingcashcreditlineagreementofEUR5mwithDeutsche

BankwasamendedtoSeptember30,2017,inlinewiththematuritiesofCommerzbankandDZBANK.Thecreditlinesaresecured

by inventories and an assignment of receivables (blanket assignment), and they include standard covenants. As in the prior year,

noneofthesecreditlineswereutilizedasofJune30,2017.

2.4.3. Net assets

AsofJune30,2017,non-currentassetsamounttoEUR34,812k,aslightdecreaseof2%comparedtoDecember31,2016.Thelargest

changeresultsfromthereclassificationofEUR1,250kintimedepositsfromothernon-currentfinancialassetstoothercurrent

financial assets. Additionally, intangible assets increasedby EUR595k. This effects stemsbasically from the foreign exchange

remeasurement of the Feedo Group domains that are accounted for in PLN.

Currentassetsdecreasedby17%comparedtoDecember31,2016,andamounttoEUR71,828kasofJune30,2017.Thereduction

mainlyresultsfromreducedcashandcashequivalents,describedunder2.4.2.Ofthetimedepositsrecognizedwithinothercurrent

financialassets,EUR1,250kwererepaid.Atthesametime,previouslynon-currenttimedepositsofEUR1,250karenowrecognized

as current time deposits. Furthermore, inventories decrease by 9% to EUR 19,605k. The reduction is a result of improved capital

management, the sell-offof old stock, and theproduct range consolidation as oneof themeasuresof the STARprogram. In

addition to the reduced gross inventory, the improved inventory structure positively impacts the impairment of merchandise, that

declinessignificantly.

Assets

kEUR

NON-CURRENT ASSETS

Intangible assets

Fixed assets

Otherfinancialassets

Othernon-financialassets

Deferred tax assets

Total non-current assets

CURRENT ASSETS

Inventories

Prepayments

Trade receivables

Income tax receivables



Cash and cash equivalents

Total current assets

TOTAL ASSETS

June 30,

2017

31,764

754

2,065

219

10

34,812

19,605

786

2,156

11

7,421

3,387

38,462

71,828

106,640

December 31,

2016

31,169

865

3,146

330

10

35,520

21,645

374

2,508

6

7,330

2,990

51,302

86,155

121,675

absolute

in kEUR

595

-111

-1,081

-111

0

-708

-2,040

412

-352

5

91

397

-12,840

-14,327

-15,035

relative

in %

2%

-13%

-34%

-34%

0%

-2%

-9%

>100%

-14%

83%

1%

13%

-25%

-17%

-12%

Change

14


ComparedtoDecember31,2016,theGroup’sequitydecreasedbyEUR13,335ktoEUR66,900kasofJune30,2017,mainlydueto

thelossfortheperiod.Share-basedpaymentobligationsrecognizedinequityhaveacontraryeffectonthesharepremiumand

increase by EUR 5,569k, thereof EUR 5,204k from the acquisition of Bebitus, EUR 66k from the acquisition of Feedo and EUR 299k

fromstockoptionprogramstoemployeesofwindeln.deSE.

Non-currentliabilitiesdecreasedslightlyby3%toEUR6,796kasofJune30,2017.Themainreductionstemsfromlowerliabilities

from contingent considerations (Earn Outs) for the Feedo Group. Those decreased from EUR 499k as of December 31, 2016, to

EUR109kasofJune30,2017.Inthiscontext,otheraccruedemployeebenefitsincreasedbyEUR169k.SinceQ22017,partsof

share-basedpaymentswillbesettledwithcash.Therefore,atransferfromsharepremiumtootheraccruedemployeebenefitswas

necessary.Deferredtaxes,recognizedmainlyfordomainsfrombusinesscombinations,remainthemostmaterialpositionwithin

non-current liabilities. The change of EUR 107k stems basically from the foreign exchange remeasurement of Feedo’s deferred

taxes that are accounted for in PLN.

Currentliabilitiesdecreaseby4%comparedtoDecember31,2016,andamounttoEUR32,944kasofJune30,2017.Withincurrent

liabilities,deferredrevenuesreducedbyEUR1,436k.Thisresultsfromfasterdeliveriestocustomersandthecorrespondinglower

deferralof customer fees.Additionally, in thecourseofadopting IFRS15 “Revenue fromContractswithCustomers”, liabilities

fromloyaltybonusesarerecognizedwithindeferredrevenuesandtheprioryearnumberswererestatedaccordingly.Lessloyalty

bonuses given to customers contribute to the decrease of deferred revenues.

Equity and liabilities

kEUR

EQUITY

Issued capital

Share premium

Treasury shares

Accumulated loss

Cumulated other comprehensive income

Total equity

NON-CURRENT LIABILITIES

Definedbenefitobligationsandotheraccruedemployeebenefits

Other provisions

Financial liabilities

Otherfinancialliabilities

Deferred tax liabilities

Total non-current liabilities

CURRENT LIABILITIES

Other provisions


Trade payables

Deferred revenues

Income tax payables


Othernon-financialliabilities

Total current liabilities

TOTAL EQUITY AND LIABILITIES

June 30,

2017

26,318

165,562

-370

-124,557

-53

66,900

338

7

99

188

6,164

6,796

217

69

17,413

3,119

3

8,199

3,924

32,944

106,640

December 31,

2016 R

26,318

159,993

-370

-105,473

-233

80,235

153

86

119

589

6,057

7,004

424

64

17,517

4,555

12

8,592

3,272

34,436

121,675

absolute

in kEUR

-

5,569

-

-19,084

180

-13,335

185

-79

-20

-401

107

-208

-207

5

-104

-1,436

-9

-393

652

-1,492

-15,035

relative

in %

-

3%

-

18%

-77%

-17%

>100%

-92%

-17%

-68%

2%

-3%

-49%

8%

-1%

-32%

-75%

-5%

20%

-4%

-12%

Change

15


2.4.4. Net overall statement

Overall,thefirsthalfof2017hasbeensatisfying.Therevenuegrowthof16%slightlyexceedstheoutlookwindeln.degaveinthe

Annual Report 2016. In addition, adjusted EBIT (as % of revenues) and operating contribution (as % of revenues) improved slightly

to moderately.

2.5. Otherfinancialperformanceindicators

In the consolidated statement of profit and loss, marketing costs are recognized within selling and distribution expenses.

Marketing costs mainly consist of advertising expenses, including search engine marketing, online display and other marketing

channelexpenses,aswellascostsforthemarketingtoolsoftheGroup.InH12017,theGrouprecognizedmarketingexpensesof

EUR6,009k(H12016:EUR6,494k).Wedefinemarketingcostratioasmarketingcostsdividedbyrevenuesforthemeasurement

period.Themarketingcostratioimprovedby1.5ppandisnowat5.6%.

Fulfilmentcostsconsistoflogisticsandwarehouserentalexpensesthatarerecognizedwithinsellinganddistributionexpensesin

theconsolidatedstatementofprofitandloss.Adjustedfulfilmentcostsexcludecostsinconnectionwiththereorganizationofthe

Swisswarehouse.Wedefineadjustedfulfilmentcostratioasadjustedfulfilmentcostsdividedbyrevenuesforthemeasurement

period.

InH12017,theadjustedfulfilmentcostratiowas14.8%compared18.7%inH12016.Theimprovementisprimarilyattributableto

theengagementofanewtransportserviceproviderfordeliveriestoChina.

H1 2016 R

7.1%

18.7%

16.9%

3.1%

H1 2017

5.6%

14.8%

16.4%

4.2%

Q2 2016 R

7.8%

18.3%

17.3%

3.4%

Q2 2017

5.3%

14.2%

16.9%

6.4%

Change

-2.5pp

-4.1pp

-0.4pp

3pp

Marketing cost ratio

(as % of revenues)

Adjustedfulfilmentcostratio

(as % of revenues)

Adjusted other SG&A costs

(as % of revenues)

Operating contribution

(as % of revenues)

Change

-1.5pp

-3.9pp

-0.5pp

1.1pp

H1 2016 R

-15,652

-1,819

-17,471

303

-17,168

18.7%

H1 2017

-13,779

-1,867

-15,646

-95

-15,741

14.8%

Q2 2016 R

-7,423

-873

-8,296

66

-8,230

18.3%

Q2 2017

-6,777

-917

-7,694

-41

-7,735

14.2%

absolutein kEUR

646

-44

602

-107

495

-4.1pp

relativein %

-9%

5%

-7%

<-100%

-6%

Change

kEUR

Logistics

Warehouse rent

Fulfilment costs

Adjustments

Adjusted fulfilment costs

Adjustedfulfilmentcostratio

(as % of revenues)

absolutein kEUR

1,873

-48

1,825

-398

1,427

-3.9pp

relativein %

-12%

3%

-10%

<-100%

-8%

Change

16


Other selling, general and administrative expenses (other SG&A expenses) consist of selling and distribution expenses, excluding

marketingcostsandfulfilmentcosts,andadministrativeexpensesaswellasotheroperatingincomeandexpenses.Adjustedother

SG&Aexpensesexcludeexpensesinconnectionwithshare-basedcompensationaswellasexpensesandincomeinconnection

withacquisitionsandintegrationofnewsubsidiariesandexpensesinconnectionwiththeexpansionoftheGroup.Intheprioryear

period,expensesforreorganization,internalrestructuringmeasuresandtheERPsystemchangewereadjusted,too.Wedefine

adjusted other SG&A Expenses (in % of revenues) as adjusted other SG&A expenses divided by revenues.

InH12017,adjustedotherSG&Acostsamount to16.4%as%of revenues,compared to16.9% in theprioryearperiod.They

increasedisproportionallyslowerthanrevenues.

Wedefineoperatingcontributionasadjustedgrossprofitexcludingmarketingcostsandadjustedfulfilmentcosts.Theadjustments

ofgrossprofitmainlyrelatetoshare-basedcompensation.Intheprioryearperiod,costsfortheERPsystemchangewereadjusted,

too.

InH12017,operatingcontributionisat4.2%,about1.1ppabovetheprioryearperiod.Thismainlyresultsfromsavingsin

logisticsexpensesaspartofadjustedfulfilmentcosts.

H1 2016 R

-9,729

-11,917

607

-595

-21,634

6,075

-15,559

16.9%

H1 2017

-10,779

-12,945

654

-569

-23,639

6,191

-17,448

16.4%

Q2 2016 R

-4,950

-5,607

520

-518

-10,555

2,775

-7,780

17.3%

Q2 2017

-5,728

-7,833

394

-507

-13,674

4,448

-9,226

16.9%

absolutein kEUR

-778

-2,226

-126

11

-3,119

1,673

-1,446

-0.4pp

relativein %

16%

40%

-24%

-2%

30%

60%

19%

Change

kEUR

Sellinganddistributionexpenses(w/o

marketingandfulfilmentcosts)




Other SG&A costs

Adjustments



(as % of revenues)

absolutein kEUR

-1,050

-1,028

47

26

-2,005

116

-1,889

-0.5pp

relativein %

11%

9%

8%

-4%

9%

2%

12%

Change

H1 2016 R

26,400

94

26,494

-6,494

-17,168

2,832

3.1%

H1 2017

26,214

12

26,226

-6,009

-15,741

4,476

4.2%

Q2 2016 R

13,169

94

13,263

-3,512

-8,230

1,521

3.4%

Q2 2017

14,114

8

14,122

-2,888

-7,735

3,499

6.4%

absolutein kEUR

945

-86

859

624

495

1,978

3.0pp

relativein %

7%

-91%

6%

-18%

-6%

>100%

Change

kEUR

Grossprofit

Adjustments

Adjusted gross profit

Marketing costs

Adjustedfulfilmentcosts



(as % of revenues)

absolutein kEUR

-186

-82

-268

485

1,427

1,644

1.1pp

relativein %

-1%

-87%

-1%

-7%

-8%

58%

Change

17


2.6. Othernon-financialperformanceindicators

Non-financialperformanceindicatorsalsoshowedapositivedevelopmentcomparedtoprioryear.Sitevisits,numberoforders

andgrossorderintakenoticablyincreased.Thisdevelopmentisattributabletotheincreasingshareofmobileusersasshownin

the table above.

Returns (as % of Gross Revenues from Orders) nearly halved compared to prior year. The decrease is mainly attributable to a higher

shareofrevenuesoutsidetheGSAregionandthereforealsoanhighershareofproductswithlowreturnrates.

3. Outlook

TheoutlookofrevenuedevelopmentandthedevelopmentoftheGroup’sfinancialandnon-financialperformanceindicators–

giveninAnnualReport2016–stillappliesasofJune30,2017.PleaserefertoAnnualReport2016forfurtherinformation.

4. Opportunities and risks report

Aspartoftheclosingprocessforthefiscalyear2016,windeln.deGroupmadeariskassessment.Attheendofthefirsthalfyear

2017, a planned reassessment has been performed. Compared to the assessment as of December 31, 2016, the assessment of

someriskshasbeenchangedsignificantly.TheGroupdoesnotseeamaterialchangeofopportunities.

Anyassignmentofriskstoanotherriskclassbasedonthelastevaluationisconsideredasamaterialchange.Fortheclassification

asalow,mediumorhighrisk,thesamethresholdsareappliedastheonesfortheAnnualReport2016.Inthefollowing,allmaterial

changeswillbepresented.

Risk resulting from integration

The Group sees an increased risk related to the planned integration of its subsidiaries Bebitus and Feedo. The main risk is that

plannedsynergieswillbeleveragedlaterthanestimatedorthatproblemswhichdisturbtheoperationalbusinessariseduringthe

implementationofnewsystemssuchasthemigrationoftheERPsystemsorthelaunchofanewshopsoftware.TheGroupreduces

this risk by intensive project planning and management. Nevertheless, the Group sees an increased risk particularly regarding IT

risks.

Supplier risks

As the Group is dependent on a limited number of suppliers, in particular for baby food and diapers, it is subject to the risk

thatsuppliersdefaultoroffertheirproductstolessfavorableconditions.Thiswouldhaveanegativeeffectonrevenuesandin

particular on product margins. Among other things, the Group sees an increased probability of occurrence for this risk as a result

ofthedeliberatereductionofofferedbrandsandproductsandregardstheriskashigh.

Organizational and legal risks

Astheplannedmoveofthecentralwarehousehasbecomemoreconcretewithinthelastmonths,theoccurrenceprobabilityof

risksrelatedtothewarehousemovehasincreasedcomparedtotheassessmentasofDecember31,2016.

H1 2016 R

43,452,238

60.3%

43.2%

1,125,437

102,408,445

6.0%

H1 2017

47,921,269

69.1%

46.8%

1,209,634

104,982,475

3.3%

Q2 2016 R

22,105,910

62.0%

43.9%

531,926

47,886,059

5.8%

Q2 2017

21,883,792

69.8%

47.3%

580,052

52,772,633

2.9%

Site Visits

Mobile Visit Share (as % of Site Visits)

Mobile Orders (as % of Number of Orders)

Number of Orders

Gross Order Intake ( in EUR)

Returns (as % of Revenues from Orders)

18


Furthermore,penalties for theviolationof regulatoryprovisionswhichare related to thepublication requirementsasa listed

companyaswell as related todataprotection regulationswere increased. Inorder tomeetall requirementsandobligations,

individuals have been made responsible and corresponding processes have been established in the Group to monitor all relevant

developments. Nevertheless, due to the increased requirements the Group regards the legal risks as high.

19


Consolidated income statement and other comprehensive income

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

H1 2016 R

91,925

-65,525

26,400

-33,694

-11,917

607

-595

-19,199

820

-14

806

-18,393

-8

-18,401

-2,892

-21,293

-339

-339

-21,632

-0.81

-0.75

-0.70

-0.64

H1 2017

106,481

-80,267

26,214

-32,434

-12,945

654

-569

-19,080

33

-43

-10

-19,090

6

-19,084

-

-19,084

180

180

-18,904

-0.73

-0.63

-0.73

-0.63

kEUR

Continuing operations

Revenues

Cost of sales

Gross profit





Earnings before interest and taxes (EBIT)

Financial income

Financial expenses

Financial result


Income taxes

Profit or loss from continuing operations

Profit or loss after taxes from discontinued operations


Other comprehensive income that may be reclassified to profit or loss in subsequent

periods:

Exchangedifferencesontranslationofforeignoperations

OTHER COMPREHENSIVE INCOME OR LOSS, NET OF TAX

TOTAL COMPREHENSIVE INCOME OR LOSS, NET OF TAX



Basic earnings per share from continuing operations (in EUR)

Diluted earnings per share from continuing operations (in EUR)

Q2 2016 R

44,886

-31,717

13,169

-16,758

-5,607

520

-518

-9,194

710

47

757

-8,437

-8

-8,445

-1,662

-10,107

-384

-384

-10,491

-0.38

-0.35

-0.32

-0.29

Q2 2017

54,602

-40,488

14,114

-16,310

-7,833

394

-507

-10,142

15

-10

5

-10,137

3

-10,134

-

-10,134

-177

-177

-10,311

-0.39

-0.34

-0.39

-0.34

20


Consolidatedstatementoffinancialposition

Assets

kEUR

NON-CURRENT ASSETS

Intangible assets

Fixed assets



Deferred tax assets

Total non-current assets

CURRENT ASSETS

Inventories

Prepayments

Trade receivables

Income tax receivables




Total current assets

TOTAL ASSETS

June 30,

2017

31,764

754

2,065

219

10

34,812

19,605

786

2,156

11

7,421

3,387

38,462

71,828

106,640

December 31,

2016

31,169

865

3,146

330

10

35,520

21,645

374

2,508

6

7,330

2,990

51,302

86,155

121,675

Equity and liabilities

kEUR

EQUITY

Issued capital

Share premium

Treasury shares

Accumulated loss

Cumulated other comprehensive income

Total equity

NON-CURRENT LIABILITIES

Definedbenefitobligationsandotheraccruedemployeebenefits

Other provisions



Deferred tax liabilities

Total non-current liabilities

CURRENT LIABILITIES

Other provisions


Trade payables

Deferred revenues

Income tax payables


Othernon-financialliabilities


TOTAL EQUITY AND LIABILITIES

June 30,

2017

26,318

165,562

-370

-124,557

-53

66,900

338

7

99

188

6,164

6,796

217

69

17,413

3,119

3

8,199

3,924

32,944

106,640

December 31,

2016 R

26,318

159,993

-370

-105,473

-233

80,235

153

86

119

589

6,057

7,004

424

64

17,517

4,555

12

8,592

3,272

34,436

121,675

21


Consolidatedstatementofcashflows

kEUR

Profitorlossfortheperiod

Amortization(+)/impairment(+)ofintangibleassets

Depreciation(+)/impairment(+)offixedassets

Increase(+)/decrease(-)inotherprovisions

Non-cashexpenses(+)fromemployeebenefits

Othernon-cashexpense(+)/income(-)items

Increase(-)/decrease(+)ininventories

Increase(-)/decrease(+)inprepayments

Increase(-)/decrease(+)intradereceivables

Increase(-)/decrease(+)inotherassets

Increase(+)/decrease(-)intradepayables

Increase(+)/decrease(-)indeferredrevenues

Increase(+)/decrease(-)inotherliabilities

Gain(-)/loss(+)fromdisposalofintangibleandfixedassets

Interestexpenses(+)/income(-)

Incometaxexpenses(+)/income(-)

Incometaxpaid(-)/received(+)

Net cash flows from / used in operating activities

Proceeds(+)fromsalesofintangibleandfixedassets

Purchase (-) of intangible assets

Purchase(-)offixedassets

Purchase(-)orproceeds(+)fromfinancialinvestments

Payments(-)orrefunds(+)inconnectionwithadditionstogroupstructureless

acquired cash and cash equivalents

Interestreceived(+)

Net cash flows from / used in investing activities

Transaction cost (-) on issue of shares

Repayment(-)offinanceleaseliabilities

Proceeds(+)fromfinancialliabilities

Repayment(-)offinancialliabilities

Interest paid (-)

Netcashflowsfrom/usedinfinancingactivities

Cash and cash equivalents at the beginning of the period

Netincrease/decreaseincashandcashequivalents

Change in cash and cash equivalents due to foreign exchange rates

Cash and cash equivalents at the end of the period

H1 2017

-19,084

690

233

-285

5,983

-132

2,091

-411

361

-532

-235

-1,441

-372

32

3

-6

-9

-13,114

27

-832

-142

1,250

-8

2

297

-

-35

19

-6

-4

-26

51,302

-12,843

3

38,462

H1 2016 R

-21,293

444

259

58

4,964

228

-2,179

1,359

-3,207

-18

-1,682

169

47

-13

-22

4

-2

-20,884

-

-800

-528

-

678

28

-622

-18

-24

-

-5

-6

-53

88,678

-21,559

-3

67,116

Q2 2017

-10,134

351

114

-97

4,371

-3

1,115

-451

51

-503

1,050

-1,794

-64

30

-

-3

-8

-5,975

5

-183

-62

625

-8

1

378

-

-17

-30

-3

0

-50

44,112

-5,647

-3

38,462

Q2 2016 R

-10,107

243

123

29

2,294

436

-1,118

341

-4,509

-189

1,962

-279

-1,059

-13

-12

10

-3

-11,851

-

-297

-120

-

678

13

274

-18

-13

-

-2

-1

-34

78,730

-11,611

-3

67,116

22


Consolidated statement of changes in equity

kEUR

As at January 1, 2017

Total comprehensive income or loss of the period

Issue of share capital

Repurchaseofownshares

Transaction costs

Share-based payments

As at June 30, 2017

As at January 1, 2016

Total comprehensive income or loss of the period

Issue of share capital

Repurchaseofownshares

Transaction costs


As at June 30, 2016 R

Sharepremium

159,993

-

-

-

-

5,569

165,562

154,570

-

27

-

-21

5,002

159,578

Treasuryshares

-370

-

-

-

-

-

-370

-

-

-

-370

-

-

-370

Issuedcapital

26,318

-

-

-

-

-

26,318

25,746

-

537

-

-

-

26,283

23


Actuarial gains or losses from remeasurementofdefinedbenefit

pension plans

14

-

-

-

-

-

14

-28

-

-

-

-

-

-28

Othercomprehensive

income

-233

180

-

-

-

-

-53

-20

-339

-

-

-

-

-359

Totalequity

80,235

-18,904

-

-

-

5,569

66,900

116,796

-21,632

564

-370

-21

5,002

100,339

Exchangedifferenceson translation of foreign

operations

-247

180

-

-

-

-

-67

8

-339

-

-

-

-

-331

Accumulatedloss

-105,473

-19,084

-

-

-

-

-124,557

-63,500

-21,293

-

-

-

-

-84,793

24


CONDENSED NOTES TO THE INTERIM CONSOLIDATED FINANCIALSTATEMENTS AS OF JUNE 30, 2017

1. General information

windeln.deSE(the“Company”)isastockcorporationunderGermanlawwhosesharesarepubliclytradedontheregulatedmarket

(Prime Standard) of the Frankfurt Stock Exchange since May 6, 2015. The Company is entered in the commercial register at Munich

localcourtunderHRB228000.TheregisteredofficesoftheCompanyarelocatedatHofmannstr.51in81379Munich,Germany.

windeln.deSEistheparentofthewindeln.deGroup(“windeln.de”orthe“Group”).

ThecondensedandunauditedinterimconsolidatedfinancialstatementsasofJune30,2017,wereapprovedforpublicationby

resolution of the management board on August 4, 2017.

2. Basic accounting policies

ThecondensedinterimconsolidatedfinancialstatementsasofJune30,2017,werepreparedinaccordancewiththeInternational

Financial Reporting Standards (IFRS) as adopted in the EuropeanUnion (EU). These interim consolidated financial statements

conformwiththeregulationIAS34“Interimfinancialreporting”.

Thecondensedinterimconsolidatedfinancialstatementsdonotincludealltheinformationanddisclosuresrequiredintheannual

financialstatements,andshouldthereforebereadinconjunctionwiththeconsolidatedfinancialstatementsfortheyearended

December 31, 2016.

Generally, the sameaccountingandmeasurementprincipleswereappliedas in the consolidatedfinancial statements for the

financial year ended December 31, 2016. Exceptions relate to new or revised accounting standards that either require first

applicationinfiscalyear2017orthatareearlyadoptedinfiscalyear2017.Werefertosection3.2“Newaccountingstandards

issuedbytheIASB”ofournotestotheconsolidatedfinancialstatementsasofDecember31,2016.Thefirstadoptionofnewor

revisedIFRSstandardshadnoeffectontheincomepositionoftheGroup.ThefirstadoptionofIFRS15“RevenuefromContracts

withCustomers”hadeffectsontheGroup’snetassetposition.Pleaserefertonote3.1.

Theimplementationprogressofnewbutnotyetapplicablestandardsisdescribedbelow:

IFRS 9 Financial Instruments (Required effective date January 1, 2018)

Thenewstandardisnotappliedbeforetherequiredeffectivedate.Thepreliminaryassessmentmaybesubjecttochangessince

theanalysisisnotyetcompletedandtheimpactontheGroup’sfinancialstatementscannotyetbefinallydetermined.

Classification of financial assets

• windeln.decategorizesitsdebtinstrumentsasloansandreceivables(LaR)orasheld-to-maturityinvestments(htm)thatare

all measured at amortized cost. It is expected that the majority of those debt instruments is measured at amortized cost

underIFRS9becausetheyareheldwiththeintentiontogeneratecontractualcashflows,thatsolelyrepresentredemption

and interest payments.

• Equityinstrumentsareofimmaterialamountandarecategorizedasavailable-for-salefinancialassets(afs)butarerecognized

atcostbecausetheycannotbereliablymeasured.UnderIFRS9,theywouldbemeasuredatamortizedcost.windeln.dedoes

not expect to use the FVOCI option.

• Derivatives are of immaterial amount and are categorized as assets held for trading (hft) as they are not designated as a

hedginginstrumentineffectivehedgingrelationships.DerivativesdonotfulfilthecashflowconditionsintroducedinIFRS9,

thereforetheycontinuetoberecognizedatfairvaluethroughprofitorlossunderIFRS9.

25


Impairment of financial assets

Tradereceivablesof thewindeln.deGrouphavenosignificantfinancingcomponentandcan thereforebeassessedunder the

simplifiedimpairmentmodelinIFRS9,wheretheexpectedcreditlossesarerecognizedoverthecumulatedruntime.Itisexpected

thatthecurrentimpairmentmatrixiscomplianttoIFRS9,andthereforenoimpactonnetassets,financialpositionandresultsof

operations is expected.

Newregulationsonmeasurementoffinancialliabilitiesandaccountingofhedginginstrumentsarenotapplicableatwindeln.de.

IFRS 16 Leases (required effective date January 1, 2019)

Theapplicationofthenewstandardwillaffectleaseditemssuchasofficeandwarehousespacesandleasedcompanycarsifthey

exceedcertaintermsandquantitativethresholds.Theirrecognitionasfinanceleaseswillresultinacapitalizationofnewrightsof

use,andsimultaneouslyacapitalizationoffinancialliabilities.

windeln.de Group opts to continue to recognize short-term and low-ticket lease agreements as operating lease. The Group

currentlyanalyzesallleaseagreements,whereaspriorityisgiventolegalentitieswithoperatingbusinessratherthantoservice

entities.Especiallythemeasurementofrenewaloptionsintheleaseagreementsrequiresadditionalinvestigation.Therefore,no

estimateofthequantitativeimpactontheGroup’snetassets,financialpositionandresultsofoperationscanyetbeprovided.

Inaddition,ashiftofexpensesfromoperatingleaseexpensestofinancialexpensesfromleaseliabilitiesisexpected.TheGroup

hasnotyetdecidedifafullretrospectiveapproachormodifiedretrospectiveapproachshouldbeapplied.TheGrouphasnotyet

decidedifitwillapplyanearlyadoption.

3. Restatements

3.1. Presentation of loyalty bonuses

InconnectionwiththeearlyadoptionofIFRS15“RevenuefromContractswithCustomers”,unfulfilledperformanceobligations

fromloyaltybonusesarepresentedwithindeferredrevenuesaspartofso-calledcontractliabilitiesthatareaccountedforunder

IFRS 15, andnotwithin provisions that are accounted for under IAS 37. Thus, the position “deferred revenues” cumulates all

unfulfilledperformanceobligationsoftheGrouptowardscustomers.Thechangeinaccountingpolicyisappliedretrospectively

andhasthefollowingimpactontheconsolidatedstatementoffinancialposition:

kEUR

Other current provisions

Deferred revenues


Loyalty bonuses

-1,238

1,238

-

Adjusted

December 31, 2016 R

424

4,555

34,436

Aspresented

December 31, 2016

1,662

3,317

34,436

kEUR

Other current provisions

Deferred revenues


Loyalty bonuses

-1,932

1,932

-

Adjusted

January 1, 2016 R

289

6,284

34,373

Aspresented

January 1, 2016

2,221

4,352

34,373

26


3.2. Restatementsinconnectionwithbusinesscombinations

InconnectionwiththeacquisitionofFeedoSp.zo.o.anditssubsidiaries(hereinafterreferredtoas“FeedoGroup”or“Feedo”)in

2015,areviewprocessoftheissuedsellerguaranteeswasperformedinJanuary2016.Thereviewwastriggeredbynewfindings

thatindicatedanincompletenessofthebusinessplanattheacquisitiondate.Inthecourseofthisreviewprocess,windeln.deSE

andtwoofthesellersoftheFeedoGroupagreedonacompensationpaymentofEUR1,050kinMarch2016.Thecompensation

paymentwasreceivedinApril2016.InMay2016,windeln.deSEagreedwiththethreeremainingsellersoftheFeedoGroup,an

investorandbothfounders,onacompensationofEUR2,128kthatwillbeoffsetagainstsubsequentpurchasepricepayments

(Earn Outs) in the coming years. The compensation claim has a present value of EUR 2,051k as of the acquisition date.

The subsequent correction of the purchase price and the business plan results in an amendment of the purchase price; the

non-forfeitable portion of that purchase price (contingent purchase price, so-called Earn Out) is part of the total transferred

consideration.All threecomponents(a)theamendedbusinessplan, (b)thecompensationpaymentreceivedand(c)theoffset

againstfuturecontingentpurchasepricepaymentsaretoberecognizedasadjustmenttothetransferredconsiderationwithinthe

measurementperiodduringwhichtheacquirershall–inaccordancewithIFRS3.46–adjusttheprovisionalamountsrecognized

for a business combination.

Theretrospectiverecognitionofthepurchasepriceamendmentasofthepurchasedateinfiscalyear2015isdescribedinnote3.4

“Restatementsinconnectionwithbusinesscombinations”inthenotestotheconsolidatedfinancialstatementsasofDecember

31, 2016.

InthepublishedinterimconsolidatedfinancialstatementsasofJune30,2016,theabove-mentionedcompensationclaimstothe

sellers of the Feedo Group in the amount of EUR 3,101k are recognized as other operating income. The subsequent correction of

thepurchasepricehappenedonlyafterpublicationoftheinterimconsolidatedfinancialstatements,givingrisetoarestatementof

otheroperatingincomeofthefirstsixmonthsof2016.

3.3. Discontinued operations

OnJuly28,2016,themanagementboardwithapprovalbythesupervisoryboardannouncedthatthebusinessmodelflashsales

will be discontinued. Flash sales operationswere the sole business activity of the ShoppingClubs business segment and the

“ShoppingClubs”operatingsegment.WiththefinalexitofflashsalesoperationsbyendofSeptember2016,thebusinesssegment

qualifiesasadiscontinuedoperationunderIFRS,andisthereforeretrospectivelypresentedseparatelyfromcontinuingoperations

in the Group’s consolidated statement of comprehensive income of the year 2016.

27


As a result of the retrospective purchase price adjustment (see note 3.2) and the presentation of discontinued operations, the

consolidatedincomestatementandothercomprehensiveincomeofthefirstsixmonthsof2016isrestatedasfollows:

kEUR

Revenues

Cost of sales

Gross profit






Financial income

Financial expenses

Financial result


Income taxes


Profit or loss after tax from discontinued

operations


OTHER COMPREHENSIVE INCOME OR LOSS, NET OF

TAX

TOTAL COMPREHENSIVE INCOME OR LOSS, NET OF

TAX



Basic earnings per share from continuing

operations (in EUR)

Diluted earnings per share from continuing

operations (in EUR)

Adjusted

H1 2016 R

91,925

-65,525

26,400

-33,694

-11,917

607

-595

-19,199

820

-14

806

-18,393

-8

-18,401

-2,892

-21,293

-339

-21,632

-0.81

-0.75

-0.70

-0.64

aspresented

H1 2016

101,575

-71,952

29,623

-39,609

-12,155

3,754

-602

-18,989

820

-15

805

-18,184

-8

-18,192

-

-18,192

-403

-18,595

-0.70

-0.64

n/a

n/a

Changes from retrospective purchase

price adjustments in accordance with IFRS 3

-

-

-

-

-

-3,101

-

-3,101

-

-

-

-3,101

-

-3,101

-

-3,101

64

-3,037

Changes from presentation of

discontinued operation

-9,650

6,427

-3,223

5,915

238

-46

7

2,891

-

1

1

2,892

-

2,892

-2,892

28


Thetables inthepresentedinterimconsolidatedfinancialstatementsaremarkedwith“R” ifthedisclosednumbershavebeen

restatedcomparedtothelastpublishedconsolidatedfinancialstatementsasofDecember31,2016,andtheinterimconsolidated

financialstatementsasofJune30,2016.

4. Segment reporting

ThebasisofsegmentationremainsunchangedcomparedtothelastconsolidatedfinancialstatementsasofDecember31,2016.

With the accelerating technical and disciplinary integration of the International Shops, the general reporting structures in the

windeln.deGrouparecurrentlyanalyzedandreorganizedifnecessary.Asaconsequence,thatorganizationalrestructuringmay

trigger a change in the future segment reporting.

kEUR

Revenues

Cost of sales

Gross profit






Financial income

Financial expenses

Financial result


Income taxes


Profit or loss after tax from discontinued

operations


OTHER COMPREHENSIVE INCOME OR LOSS, NET OF

TAX

TOTAL COMPREHENSIVE INCOME OR LOSS, NET OF

TAX



Basic earnings per share from continuing operations

(in EUR)

Diluted earnings per share from continuing

operations (in EUR)

Adjusted

Q2 2016 R

44,886

-31,717

13,169

-16,758

-5,607

520

-518

-9,194

710

47

757

-8,437

-8

-8,445

-1,662

-10,107

-384

-10,491

-0.38

-0.35

-0.32

-0.29

Aspresented

Q2 2016

49,443

-34,746

14,697

-19,837

-5,728

2,583

-519

-8,804

710

46

756

-8,048

-8

-8,056

-

-8,056

-431

-8,487

-0.31

-0.28

n/a

n/a

Changes from retrospective purchase

price adjustments in accordance with IFRS 3

-

-

-

-

-

-2,051

-

-2,051

-

-

-

-2,051

-

-2,051

-

-2,051

47

-2,004

Changes from presentation of

discontinued operations

-4,557

3,029

-1,528

3,079

121

-12

1

1,661

-

1

1

1,662

-

1,662

-1,662

29


Inthefirstsixmonths,operatingsegmentsdevelopedasfollows:

H1 2017

kEUR

Revenues

EBIT contribution

Expenses from share-based payments

Expensesinconnectionwithexpansion

Expensesinconnectionwithreorganization

ExpensesinconnectionwiththeERPsystem

change

Adjusted EBIT contribution

as % of revenues

Corporate


Financial result

Income taxes

Profit or loss for the period

German Shop

71,957

-57

32

16

-

-

-9

-0.0%

InternationalShops

34,616

-11,012

5,698

146

-

-

-5,168

-14.9%

Other/Cons.

-92

97

-

-

-103

-

-6

Totalcontinuingoperations

106,481

-10,972

5,730

162

-103

-

-5,183

-4.9%

-8,108

-19,080

-10

6

-19,084

H1 2016 R

kEUR

Revenues

EBIT contribution



Expensesinconnectionwith

reorganization

ExpensesinconnectionwiththeERP

system change


as % of revenues

Corporate


(EBIT)

Financial result

Income taxes


German Shop

65,958

-368

117

-

-

114

-137

-0.2%

International Shops

26,009

-10,961

4,532

117

351

5

-5,956

-22.9%

Other/Cons.

-42

-12

-

-

-

-

-12


91,925

-11,341

4,649

117

351

119

-6,105

-6.6%

-7,858

-19,199

806

-8

-18,401

Shopping Clubs(discontinued

operation)

9,650

-2,891

3

6

-

54

-2,828

-29.3%

-

-2,891

-1

-

-2,892

Total

101,575

-14,232

4,652

123

351

173

-8,933

-8.8%

-7,858

-22,090

805

-8

-21,293

30


Q2 2017

kEUR

Revenues

EBIT contribution



Expensesinconnectionwithreorganization

ExpensesinconnectionwiththeERPsystem

change


as % of revenues

Corporate


Financial result

Income taxes


German Shop

36,616

1,110

24

16

-

-

1,150

3.1%

InternationalShops

18,019

-6,927

4,104

28

-

-

-2,795

-15.5%

Other/Cons.

-33

43

-

-

-24

-

19


54,602

-5,774

4,128

44

-24

-

-1,626

-3.0%

-4,368

-10,142

5

3

-10,134

Q2 2016 R

kEUR

Revenues

EBIT contribution



Expensesinconnectionwith

reorganization

ExpensesinconnectionwiththeERP

system change


as % of revenues

Corporate


(EBIT)

Financial result

Income taxes


German Shop

31,163

-71

51

-

-

114

94

0.3%

International Shops

13,765

-5,306

2,120

24

104

5

-3,053

-22.2%

Other/Cons.

-42

-10

-

-

-

-

-10


44,886

-5,387

2,171

24

104

119

-2,969

-6.6%

-3,807

-9,194

757

-8

-8,445

Shopping Clubs(discontinued

operation)

4,557

-1,661

6

-1

-

54

-1,602

-35.2%

-

-1,661

-1

-

-1,662

Total

49,443

-7,048

2.177

23

104

173

-4,571

-9.2%

-3,807

-10,855

756

-8

-10,107

31


5. Basis of consolidation

EffectiveFebruary21,2017,thecompanywindelnManagementConsulting(Shanghai)Co.,Ltd.withregisteredofficesinShanghai,

China,was founded.Thesubsidiaryoperatesasaservicecompany in theChinesemarket formarketingactivitiesand for the

development of further distribution channels. It is included in the scope of consolidation since its foundation date.

6. Notes on the subsequent measurement of the acquisitions

Acquisition of Feedo Sp. z o.o.

Following a review of the sellers’ guarantees inQ1 2016made in connectionwith the acquisition of Feedo Sp. z o.o. and its

subsidiaries (hereinafter referred toas “FeedoGroup”or “Feedo”) in July2015,windeln.deandbothof the foundersandone

investor agreed to adjust the subsequent purchase price. For detailed information, reference is made to the Annual Report 2016.

InH12017, oneof the founders of the FeedoGroup voluntarily left the company. Pursuant to thepurchase agreement, this

qualifiesasaleaverevent.windeln.deisentitledtoclaimbackfromtheleaveraportionofthesharespaidaspurchasepriceand

aportionofthesharestobeissuedfor2015and2016atbeneficialconditions.

InMay2017,windeln.deSE,thefoundersoftheFeedoGroupandtheinvestoragreedonasecondamendmentofthepurchase

agreement about (1) the unsettled subsequent purchase price payments for 2015 and 2016 and (2) the mutual claims from the

leaverevent.Themaincomponentsofthecontractamendmentareasfollows:

• The founders obtain 40% of contingent considerations for 2015 in cash. 60% of the subsequent purchase price is settled in

shares. The investor obtains 100% of the purchase price in shares.

• The subsequent purchase price for the year 2016 is fully settled in shares.

• Thecashcontribution for theparvalueofEUR1pershare,due fromthe founders,willbenettedagainst thecontingent

consideration cash payment for the year 2015. Since the supplement paymentwill exceed the contingent consideration

payment,afurthersettlementwithshareswasagreed(newclearingmechanism),alsowiththeinvestor.

• Thenewclearingmechanismshallalsobeapplicabletosubsequentpurchasepricepaymentsfortheyears2017and2018.

• Theconsequencesoftheleaverevent,pursuanttothepurchaseagreement,areasfollows.Theleavermustreturnaportion

ofthesharesreceivedatthetimeoftheacquisition,andisrewardedwithcashintheamountof60%ofthereturnedshares

asofApril13,2017.Fortheyears2015and2016,acorrespondinglyreducednumberofshareswillbeissued.Theleaveris

rewardedincash.Thecashrewardqualifiesasasettlement.Othersharesthatthe leaverreceivesfor2015and2016are

nettedwiththesharestobereturned.

• ClaimsfromsellerguaranteestowardstheleaverarereducedbyEUR30k.

As a result of the amendment, both founders and the investor receive a total of 312,438 shares and EUR 184k in cash. As of

June30,2017,cashpaymentswerealreadytransferred.TheregistrationofthecapitalincreaseintheCommercialRegisterandthe

admissionofthesharestothestockexchangearenotyetcompletedasofJune30,2017.Thesharesareissuedinthethirdquarter

of 2017.

Recognition in group financial statements

From an economic perspective, the subsequent purchase price is composed of contingent purchase price payments (Earn Outs)

accountedforunderIFRS3,and–forthetwofounders–ofshare-basedpaymentsaccountedforunderIFRS2.

So far, share-based payment commitmentswere recognizedwithin share premium based on an assumed equity-settlement.

With the contract amendment stipulating cash payments of subsequent purchase prices for 2015 and for the leaver event, a

32


reclassification of EUR 396k from share premium to other accrued employee benefitswasmade, in accordancewith IFRS 2.

Additionally, EUR 462kwere recognized for share-based payment commitments as personnel expenseswithin administrative

expenses inH12017.Theamountofshare-basedcompensationrecognizedwithinsharepremiumincreasedfromEUR1,808k

asofDecember31,2016,toEUR1,874kasofJune30,2017.Becauseoftheleaverevent,70%(2017)respective80%(2018)ofthe

leaver’sclaimsfromsubsequentpurchasepricesof2017and2018areforfeited.Theimpactsoftheleavereventwerealready

recognizedin2016astheleavereventwasassessedasprobableontheclosingdateDecember31,2016.

Asdescribed,EUR396kwerereclassifiedfromsharepremiumtootheraccruedemployeebenefitsinQ22017,becauseaportion

oftheshare-basedcompensationwillnotbesettledinshares,butincash.Outofthisportion,EUR176kwerealreadypaidinQ2

2017.AnotherEUR51kwerereleasedthroughprofitandloss,recognizedasreductionofpersonnelexpenseswithinadministrative

expenses.Therefore,otheraccruedemployeebenefitsamounttoEUR169kasofJune30,2017.Thisamountwillbefullynettedin

the second half of 2017 against the cash contribution of EUR 1 per share.

Thenon-financialassetrecognizedinconnectionwiththeprepaymentofshare-basedcompensationontheacquisitiondateto

thefoundersoftheFeedoGroupwasreducedbyEUR72k inH12017,recognizedaspersonnelexpensewithinadministrative

expenses. As of June 30, 2017, the non-current portion is nil (December 31, 2016: EUR 96k); the current portion amounts to

EUR 216k (December 31, 2016: EUR 192k).

ThefairvalueofthecontingentpurchasepriceamountstoEUR2,334kasofJune30,2017,andtoEUR2,340kasofDecember31,

2016. The change stems from the fair value measurement of EUR 1k and a cash payment of EUR 7k. The fair value measurement

wasrecognizedwithinthefinancialresult.AsofJune30,2017,theliabilityisrecognizedwithEUR2,225kinothercurrentfinancial

liabilities (December 31, 2016: EUR 1,841k) and with EUR 109k in other non-current financial liabilities (December 31, 2016:

EUR 499k).

The present value of the claim from purchase price adjustments from guarantee violations decreased from EUR 2,075k to

EUR2,066kinH12017.AreductionofthenominalvalueofEUR30kresultedinareducedpresentvalueofEUR26k,recognized

withinotheroperatingexpenses.ThevarianceofEUR17kwasrecognizedasfinancialincome.

Acquisition of Bebitus Retail S.L.U.

Recognition in group financial statements

InconnectionwiththeacquisitionofBebitusRetailS.L.U.(hereinafterreferredtoas“Bebitus”),equity-settledshare-basedpayment

awardsweregranted tomembersof the localmanagementboard in2015. Fromaneconomicperspective, theequity-settled

share-basedpaymentawardsarepartofthepurchaseprice.Inthefirstsixmonthsof2017,personnelexpensesofEUR5,204k

wererecognizedwithinadministrativeexpenses.ThecorrespondingportionwithinsharepremiumincreasedfromEUR6,101kon

December31,2016,toEUR11,305konJune30,2017.

Thefairvalueofshort-termemployeebenefitstolocalmanagement,incurredintheacquisitionofBebitus,remainsunchanged.

TheundiscountedliabilitythusamountstoEUR2,333kasofJune30,2017,andisrecognizedwithinothercurrentnon-financial

liabilities.

AsofJune30,2017,thefairvalueofthecontingentconsiderationamountstoEUR3,369kandremainsunchangedtoDecember31,

2016.ContingentpurchasepricecomponentsarefullyrecognizedwithinothercurrentfinancialassetsasofJune30,2017.

33


7. Fair value hierarchy

Thefollowingtableshowstheassetsandliabilitiesmeasuredatfairvalue,categorizedinaccordancewiththefairvaluehierarchy:

Derivativefinancialinstrumentscompriseforwardagreementstohedgeforeignexchangeriskexposures.Theyaremeasuredat

quotedpricesinactivemarketsandarethereforeclassifiedasLevel1.

Contingent considerations relate to the acquisition of the Feedo Group and the acquisition of Bebitus. The fair values are calculated

onaquarterlybasis.Theaccountingpoliciesareexplainedinnote6andwereappliedconsistentlythroughoutthereportingperiod.

ThefinancialinstrumentsaretobeclassifiedasLevel3,becausethefairvaluesarecalculatedonthebasisoftheestimatedfuture

performance of the acquired companies. Changes in the fair value are recognized in the statement of comprehensive income as

financialincomeorfinancialexpenses.

Therewerenoreclassificationsbetweenthedifferentlevelsinthereportingperiod.

kEUR

Assets

Derivativefinancialinstruments

Derivativefinancialinstruments

Liabilities

Contingent consideration

Contingent consideration

Level 2

-

-

-

-

Level 3

-

-

5,703

5,709

Valuationdate

June30,2017

December 31, 2016

June30,2017

December 31, 2016

Level 1

12

-

-

-

34


8. Notestotheconsolidatedstatementoffinancialpositionandtheconsolidatedstatementof comprehensive income

8.1. Financialassetsandfinancialliabilities

The following table shows the carryingamountsand fair valueofall financial assetsand theallocationoffinancial statement

positionstothemeasurementcategoriesinaccordancewithIAS39:

Duetotheshort-termmaturitiesofcashandcashequivalents,tradereceivablesandothercurrentfinancialassets,thefairvalues

less impairment for these items are assumed to be equal to the carrying amounts.

OthercurrentfinancialassetsincludecooperativesharesofEUR14k(December31,2016:EUR14k).Thoseassetsareallocatedto

the“availableforsale”category,butarerecognizedatcostbecausetheycannotbemeasured.

kEUR

Trade receivables

Otherfinancial

assets


Available for sale

Heldfortrading

Loans and receivables

Heldtomaturity

Measurementcategory

pursuant toIAS 39

LaR

LaR/afs/hft

/htm

LaR/htm

afs

hft

LaR

htm

Carrying amount

as ofJune 30,

2017

2,156

9,486

38,462

14

12

46,031

4,047

Amortizedcost

2,156

9,474

38,462

14

12

46,031

4,047

Fair valuein equity

-

-

-

-

-

-

-

Fair valueas of

June 30,2017

2,156

9,486

38,462

14

12

46,031

4,047

Fair valuethrough profit

or loss

-

12

-

-

12

-

-

Amount recognized in the statement of financial position in accordance with IAS 39

Aggregated by measurement category in accordance with IAS 39

kEUR

Trade receivables

Otherfinancial

assets


Available for sale

Heldfortrading

Loans and receivables

Heldtomaturity

Measurementcategory

pursuant toIAS 39

LaR

LaR/afs/

htm

LaR/htm

afs

hft

LaR

htm

Carrying amount

as ofDecember 31,

2016

2,508

10,476

51,302

14

-

59,165

5,107

Amortizedcost

2,508

10,476

51,302

14

-

59,165

5,107

Fair valuein equity

-

-

-

-

-

-

-

Fair valueas of

December 31,2016

2,508

10,476

51,302

14

-

59,165

5,107


or loss

-

-

-

-

-

-

-

Amount recognized in the statement of financial position in accordance with IAS 39


35


Thefollowingtableshowsthecarryingamountsandfairvalueofallfinancialliabilitiesandtheallocationoffinancialstatement

positionstothemeasurementcategoriesinaccordancewithIAS39ormeasurementinaccordancewithIAS17:

Duetotheshort-termmaturitiesoftradepayablesandothercurrentfinancialliabilities,thefairvaluesfortheseitemsareassumed

to be equal to the carrying amounts.

kEUR

Finance lease liabilities

Otherfinancialdebt

Trade payables


Financial liabilities measured

at amortized cost


at fair value

Measure-ment

categorypursuant to

IAS 39

n/a

FLAC

FLAC

FLAC/FLAFV

FLAC

FLAFV

Carryingamount asof June 30,

2017

135

33

17,413

8,387

20,130

5,703

Amortizedcost

-

33

17,413

2,684

20,130

-

Fair valuein equity

-

-

-

-

-

-

Fair value asof June 30,

2017

135

33

17,413

8,387

20,130

5,703


or loss

-

-

-

5,703

-

5,703

Amount recognized in the statement of financial position in accordance

with IAS 39


Amountrecognized in the

statement of financial position

pursuant to IAS 17

135

-

-

-

-

-

kEUR

Finance lease liabilities

Otherfinancialdebt

Trade payables



at amortized cost


at fair value

Measure-ment

categorypursuant to

IAS 39

n/a

FLAC

FLAC

FLAC/FLAFV

FLAC

FLAFV

Carryingamount asof Decem-

ber 31, 2016

164

19

17,517

9,181

21,008

5,709

Amortizedcost

-

19

17,517

3,472

21,008

-

Fair valuein equity

-

-

-

-

-

-

Fair value asof December

31, 2016

164

19

17,517

9,181

21,008

5,709


or loss

-

-

-

5,709

-

5,709

Amount recognized in the statement of financial position in accordance

with IAS 39


Amountrecognized in the

statement of financial position

pursuant to IAS 17

164

-

-

-

-

-

36


8.2. Equity

Capital transactions

InH12017,nocapitalincreasesoccurred.Authorizedcapital2016andconditionalcapital2016/IamounttoEUR11,773,796and

EUR7,997,804; they remainunchangedcompared to theprioryear.On itsmeetingheldon June2,2017, theAnnualGeneral

Meetingdecidedtoreduceconditionalcapital2016/IIbyEUR1,444,245tonowEUR555,206.Thepreviousauthorizationtogrant

subscriptionrightsundertheLongTermIncentiveProgram2015-2017wasrevokedintheamountof1,444,245notyetgranted

subscription rights under this authorization.

Simultaneously, a conditional capital 2017 of EUR 1,200,000 was approved. Management board and supervisory board are

authorized to grant 1,200,000 subscription rights for up to 1,200,000 non-par bearer shares of the Company under the regulations

ofthenewlycreatedLongTermIncentiveProgram2018-2021.

Issued capital

AsofJune30,2017,theissuedcapitaloftheGroupparentamountstoEUR26,318k(December31,2016:EUR26,318k).Ithasbeen

fully paid in and comprises 26,317,970 no-par value bearer shares.

Treasury shares

BymeansofasupervisoryboardresolutiononMay13,2016,theManagementBoardwasauthorizedtopurchaseupto70,000

ownwindeln.desharestosatisfysubsequentpurchasepricesfromacquisitions.Theamountoftreasurysharesstandsunchanged

to the prior year at 64,683 shares.

Share premium

AsofJune30,2017,thesharepremiumamountstoEUR165,562k(December31,2016:EUR159,993k)andbreaksdownasfollows:

Accumulated loss

Theaccumulatedlossresultsfromlossescarriedforwardfrompriorperiodsandtheresultforthecurrentreportingperiod.

December 31, 2016

165,341

-25,232

3,466

-5,464

21,844

38

159,993

June 30, 2017

165,341

-25,232

3,466

-5,464

27,413

38

165,562

kEUR

Premiumfromfinancingroundsand/orIPO

Capital increases from company funds

Contributions in kind

Costs of equity transactions


Premium from exercise of stock options

Share premium

37


8.3. Share-based payments

Share-based compensation as component of employee remuneration

Thesubscriptionrightsrecognizedinequitychangedasfollows:

TheexpenserecognizedinH12017fromtheseshare-basedpaymentobligationsamountstoEUR300k(H12016:EUR576k),with

anexpenseofEUR1krelatingtocash-settledshare-basedpayments(H12016:expenseofEUR64k)andanexpenseofEUR299k

(H12016:expenseofEUR640k)relatingtoequity-settledshare-basedpayment.

As of June 30, 2017, the carrying amount of the liability from these cash-settled share-based payment obligations is EUR 3k

(December 31, 2016: EUR 2k). The obligation is recognized under non-current liabilities.

Asof June30,2017,afigureofEUR12,148kisreportedinthesharepremiumfromtheseequity-settledshare-basedpayment

obligations (December 31, 2016: EUR 11,849k).

Share-based payment commitments in the course of acquisitions

Inaddition,shareswithcontingentreturnobligationswereissuedaspartofacquisitions(FeedoGroup)thatfallwithinthescope

ofIFRS2.Partsofcontingentconsiderationsinconnectionwithacquisitions(FeedoGroupandBebitus)alsofallwithinthescopeof

IFRS2and/orIAS19.Seenote6forfurtherdetails.

9. Related party disclosures

Pursuant to theprinciples in IAS24, themembersof themanagementboardand thesupervisoryboardofwindeln.deSEare

classifiedaskeymanagementpersonnel.OntheAnnualGeneralMeetingheldonJune2,2017,TomaszCzechowiczwaselectedas

memberofthesupervisoryboard,andthereforequalifiesaskeymanagementpersonnel.Therewerenofurtherchangesinthe

staffofthemanagementboardandthesupervisoryboard.

Transactionswith relatedpartieshavenotmaterially changed in the reportingperiod compared to the consolidatedfinancial

statements 2016.

10. Events after the reporting date

SinceQ42016,windeln.deandthefoundersofBebitusareindiscussionsabouttheexistenceofguaranteeclaimsfromtheshare

purchaseagreementandaboutpotentialreductionsofsubsequentpurchaseprices.OnJuly19,2017,windeln.deandthefounders

concludedasettlementagreementasfollows:

VSOP 1 - 2

163,676

-

-

-

14,837

178,513

178,513

Outstanding at the beginning of the reporting period

(January 1, 2017)

Expired during the reporting period

Forfeited during the reporting period

Exercised during the reporting period

Granted during the reporting period

Outstanding at the end of the reporting period (June 30, 2017)

Exercisableattheendofthereportingperiod(June30,2017)

LTIP - SO

71,338

-

7,281

-

59,533

123,590

91,700

LTIP - RSU

35,064

-

2,427

-

23,308

55,945

45,314

38


• The subsequent purchase price payments for the years 2015 and 2016 amount to EUR 8,412k. Thereof, EUR 1,700k are settled

incashandEUR6,712karesettledwith1,906,695shares.

• Thesubsequentpurchasepricefortheyear2017amountstoEUR4,896kandcanbesettledeitherwithsharesorwithcash.

Thenumberofshareswouldbedeterminedshortlybeforetheissuanceoftheshares.Theissuanceandtransferoftheshares

orthetransferofcashrespectivelywilloccurin2018.

• The original share purchase agreement stipulates a cash contribution of EUR 1 per share to be paid by the founders. Pursuant

tothenewagreement,thecashcontributionissettledwithsubsequentpurchaseprices.Thecashcontributionwillnotbe

applied.

Theabove-mentionednumbershavenotbeenincludedinthefinancialstatementsasofJune30,2017,becausetheagreement

wasonlyconcludedinJuly2017.Thefairvaluesrecognizedintheinterimconsolidatedfinancialstatementsarehigherthanthe

numbers of the settlement agreement mentioned above.

ThecashportionofthesubsequentpurchasepriceintheamountofEUR1,700kwaspaidinJuly2017.Theagreedsharesforthe

settlementofsubsequentpurchasepricesfortheyears2015and2016willbeissuedinQ32017andtransferredtotheBebitus

founders.

Munich, August 4, 2017

AlexanderBrand KonstantinUrban JürgenVedie Dr.NikolausWeinberger

RESPONSIBILITY STATEMENT

Tothebestofourknowledge,andinaccordancewiththeapplicablereportingprinciples,theconsolidatedfinancialstatements

giveatrueandfairviewofthenetassets,financialpositionandresultsofoperationsoftheGroup,andthegroupmanagement

reportincludesafairreviewofthedevelopmentandperformanceofthebusinessandthepositionoftheGroup,togetherwitha

descriptionoftheprincipalopportunitiesandrisksassociatedwiththeexpecteddevelopmentoftheGroup.

Munich, August 4, 2017

windeln.deSE

The management board

AlexanderBrand KonstantinUrban JürgenVedie Dr.NikolausWeinberger

39


SERVICE

1. Glossary

Site Visits

WedefineSiteVisitsasthenumberofseriesofpagerequestsfromthesamedeviceandsourceinthemeasurementperiodand

include visits to our online magazine. A visit

isconsideredendedwhennorequestshavebeenrecorded inmorethan30minutes.Thenumberofsitevisitsdependsona

number of factors including the availability of the

productsweoffer,thelevelandeffectivenessofourmarketingcampaignsandthepopularityofouronlineshops.Measuredby

Google Analytics.

Mobile Visit Share

WedefineMobileVisitShare(in%ofSiteVisits)asthenumberofvisitsviamobiledevices(smartphonesandtablets)toourmobile

optimizedwebsitesdividedbythetotalnumberofSiteVisitsinthemeasurementperiod.Wehaveexcludedvisitstoouronline

magazine.Untiltheendof2016wehavealsoexcludedvisitsfromChinabecausethemostcommononlinetranslationservices

onwhichmostofourcustomerswhoorderedinourGermanshopfordeliverytoChinareliedtotranslateourwebsitecontent

werenotabletodosofromtheirmobiledevices,andthereforeveryfewofsuchcustomersorderedfromtheirmobiledevices.As

wehavestartedacustomizedwebsiteforourChinesecustomersinDecember2016weincludevisitsfromChinafromQ12017

onwards.MeasuredbyGoogleAnalytics.

Mobile Orders

WedefineMobileOrders(in%ofNumberofOrders)asthenumberofordersviamobiledevicestoourmobileoptimizedwebsites

dividedbythetotalNumberofOrdersinthemeasurementperiod.FromQ12017onwardsweincludeordersfromChina.Measured

by Google Analytics.

Active Customers

WedefineActiveCustomersasthenumberofuniquecustomersplacingatleastoneorderinoneofourshopsinthe12months

preceding the end of the measurement period, irrespective of returns.

Number of Orders

WedefineNumberofOrdersasthenumberofcustomerordersplacedinthemeasurementperiodirrespectiveofreturns.An

orderiscountedonthedaythecustomerplacestheorder.Ordersplacedandordersdeliveredmaydifferduetoordersthatare

intransitattheendofthemeasurementperiodorhavebeencancelled.Everyorderwhichhasbeenplaced,butforwhichthe

products in the order have not been shipped (e.g., the products are not available or the customer cancels the order), is considered

‘‘cancelled’’. Cancelled orders are not included in the Number of Orders.

Average Orders per Active Customer

WedefineAverageOrdersperActiveCustomerasNumberofOrdersinthelasttwelvemonthsdividedbythenumberofActive

Customers.

Orders from Repeat Customers

WedefineOrdersfromRepeatCustomersasthenumberofordersfromcustomerswhohaveplacedatleastonepreviousorder,

irrespective of returns.

40


Share of Repeat Customer Orders

WedefineShareofRepeatCustomerOrdersasthenumberofordersfromRepeatCustomersdividedbytheNumberofOrdersin

thelasttwelvemonths.

Gross Order Intake

We define Gross Order Intake as the aggregate Euro amount of customer orders placed in themeasurement periodminus

cancellations. The Euro amount includes value added tax and excludes marketing rebates.

Average Order Value

WedefineAverageOrderValueasGrossOrderIntakedividedbytheNumberofOrdersinthemeasurementperiod.

Returns (as % of Gross Revenues from Orders)

WedefineReturns(in%ofGrossRevenuesfromorders(untilQ12017in%ofNetMerchandiseValue))asthereturnedamount

in Euro divided by Gross Revenues from orders in themeasurement period. From Q2 2016 onwards including Bebitus and

Feedo returns.GrossRevenues fromordersaredefinedas the total aggregatedEuroamount spentbyour customersminus

cancellations but irrespective of returns. The Euro amount does not include value added tax. As the Gross Revenues from orders

do not exclude returns and include all marketing rebates it is more reasonable to use this KPI for the return rate calculation than

the Net Merchandise Value. The change of the calculation logic has no material impact on the reported return rate. Therefore, the

calculationhasbeenchangedaccordinglyfromQ22017onwards.

Adjusted Fulfilment Cost Ratio

Wedefineadjustedfulfilmentcostratioasadjustedfulfilmentcostsdividedbyrevenuesforthemeasurementperiod.Fulfilment

costs consist of logistics and warehouse rental expenses that are recognized within selling and distribution expenses in the

consolidatedstatementofprofitand loss.Adjustedfulfilmentcostsexcludecosts inconnectionwith thereorganizationof the

Swisswarehouse.

Marketing Cost Ratio

Wedefinemarketingcostratioasmarketingcostsdividedbyrevenuesforthemeasurementperiod.

Other SG&A Expenses (as % of revenues)

WedefineadjustedotherSG&AExpenses(as%ofrevenues)asadjustedotherSG&Aexpensesdividedbyrevenues.Otherselling,

general and administrative expenses (other SG&A expenses) consist of selling and distribution expenses, excluding marketing costs

andfulfilmentcosts,andadministrativeexpensesaswellasotheroperatingincomeandexpenses.AdjustedotherSG&Aexpenses

excludeexpensesinconnectionwithshare-basedcompensationaswellasexpensesandincomeinconnectionwithacquisitions

andintegrationofnewsubsidiariesandexpensesinconnectionwiththeexpansionoftheGroup.Intheprioryearperiod,expenses

forreorganization,internalrestructuringmeasuresandtheERPsystemchangewereadjusted,too.

Operating Contribution

Wedefineoperatingcontributionasadjustedgrossprofitexcludingmarketingcostsandadjustedfulfilmentcosts.Theadjustments

ofgrossprofitmainlyrelatetoshare-basedcompensation.Intheprioryearperiod,costsfortheERPsystemchangewereadjusted,

too.

41


2. Financial calender

Commerzbank Sector Conference, Frankfurt: August 31, 2017

Berenberg/GoldmanSachsGermanCorporateConference,Munich: September19-20,2017

Capital Markets Day in Munich: September 28, 2017

Publication of nine months results 2017: November 14, 2017

DeutscheBörse“DeutschesEigenkapitalForum”inFrankfurta.M.: November27-29,2017

Münchner Kapitalmarkt Konferenz December 12 - 13, 2017

3. Imprint

Editorial team and contact

windeln.deSE

Hofmannstraße51

81379 München, Deutschland

corporate.windeln.de

Corporate Communications

JudithBuchholz

E-Mail:[email protected]

Concept, text, layout and design

windeln.deSE

Picture credits

Fotolia, iStock

Statement relating to the future

This annual report contains statements that relate to the future and are based on assumptions and estimates made by the

managementofwindeln.deSE.Evenifthemanagementisoftheopinionthattheseassumptionsandestimatesareappropriate,

the actual development and the actual future results may vary from these assumptions and estimates as a result of a variety of

factors. These factors include, for example, changes to the overall economic environment, the statutory and regulatory conditions

in Germany and the EU and changes in the industry.

windeln.deSEmakesnoguaranteeandacceptsnoliabilityforfuturedevelopmentandtheactualresultsachievedinthefuture

matching the assumptions and estimates stated in this interim report.

Itisneithertheintentionofwindeln.deSEnordoeswindeln.deSEacceptaspecialobligationtoupdatestatementsrelatedtothe

futureinordertoalignthemwitheventsordevelopmentsthattakeplaceafterthisreportispublished.

The annual report is available in English. If there are variances, the German version has priority over the English translation. It is

availablefordownloadinbothlanguagesatcorporate.windeln.de.

january - june 2017...2.2.3. cross-border e-commerce market in china windeln.de is also active in...

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